4 Tips to Drive Store Traffic with SMS Coupon Promotions this Holiday Season

by Dan Slavin

The holiday season is the biggest time of the year for retailers and can account for as much as 30% or more of a retailer’s annual sales, according to the National Retail Federation. It’s the perfect time of the year to roll out mobile coupons and SMS coupon promotions to create a sense of urgency in your customers. Balance the need for convenience by engaging customers on multiple channels, with a secure single-use system that limits your liability and watch your sales climb.

Smartphones have changed the way people shop – especially during the holiday season, 96% of consumers plan to use their mobile devices to find better retail bargains, according to Shopular. Consider also that 72% of consumers say they have looked for coupons or offers while in-store via their mobile device, a figure that rises to 90% for Millennials, according to Valassis.

There are lots of compelling reasons for retailers to add mobile SMS coupon promotions to their marketing mix instead of using traditional coupons this holiday season. Through SMS coupon promotions, you can target precise demographics, boost redemption rates, and offer customers easy access. Mobile coupons also offer an opportunity to engage with customers which can last beyond the coupon use, and the chance to analyze and track the entire funnel by individual.

Done correctly, mobile coupons can drive holiday store traffic and incremental sales. Here are four best practices that offer significant benefit for both retailers and customers:

Employ on-demand mobile coupons

Traditional paper coupons have extremely low redemption rates that typically range from as little as 0.5% to 2%. Shifting onto mobile devices, and pushing mobile coupons out to consumers subscribed to your text message marketing list, brings greater convenience that can raise redemption rates to around 10%. But there’s an even better way.

An on-demand mobile coupon model, where the consumer responds to a call-to-action to obtain a mobile coupon, can increase average redemption rates to between 30% and 50%. Because the mobile coupons live on their phones, consumers can access them at any time. Also, depending on the delivery process, you may have the ability to continue communicating to a consumer on their mobile device, which you certainly can’t do with paper.

Redemption rates are highest for on-demand access. Graph below is based on a CodeBroker ROI study and analysis of hundreds of mobile promotions and subsequent delivery of 150 million mobile coupons.

A significant payback is possible to retailers who bear in mind these factors: the value of the offer, the level of consumer engagement with the brand, the sense of urgency the retailer creates with the promotion, and the mobile coupon delivery channel.

Make mobile coupons single use

It’s important that retailers limit coupon liability, particularly with high value coupon offers. Digital coupons can go viral and without some form of security they can be used multiple times.

The smart play is to issue single-use mobile coupons with unique identifiers. Every single-use mobile coupon should be validated and cleared at the point-of-sale, so that you know it has only been used once. You want the flexibility to issue coupons across various channels, and you want coupons to expire simultaneously across your omnichannel strategy the instant they are redeemed.

You want flexibility built-in. It’s imperative to find a partner that can help you to securely distribute your coupons via multiple channels, and if your POS does not have the capability, a partner who can help you to validate and clear them. The goal is for consumers to receive and redeem offers only once while allowing you to track their behavior from end to end. This enables you to limit fraud and liability — particularly with high-value offers.

Take an omnichannel approach with mobile coupon promotions

Mobile loyalty is all about providing consumers with multiple ways to interact with your loyalty program on their mobile devices. There’s no one-size-fits-all approach that will work here. Choice and convenience are key to securing the engagement you want. Don’t force them to sign into your website or download an app.

Especially during the holidays, consumers will use the mobile channel they feel most comfortable with. That might be text messaging, email, a mobile wallet, a specific app, or even Facebook Messenger. If you can open a dialogue on their preferred mobile channel, you have a much greater chance of engaging with them than you do sending out direct mail and hoping they’ll react.

An omnichannel mobile loyalty study compiled by industry analyst EKN Research shows that retailers now rank omnichannel-related loyalty as their number 1 capability in improving loyalty and engaging customers.

Mobile coupons should work in-store or online

Mobile coupons can drive more traffic in bricks-and-mortar stores and enhance the in-store experience, but many people prefer to do their shopping online. That’s why it’s important to offer mobile coupons that can be redeemed both in-store or online. In simple terms, supporting both provides greater convenience and choice for consumers, which makes them more likely to engage.